Liquidity management: how it works?

The definition of liquidity states that it is an ability to meet cash and collateral obligations without incurring substantial losses. Thus, we can easily conclude that liquidity management is, in fact, analyzing all the liquid assets, short term liabilities, sources of profits, and costs of operation. The analysis is performed in order to determine a liquidity risk – a company’s chance of being unable to access the cash needed to pay its current expenses.

Liquidity management has become increasingly important in the times of COVID. In 2020, a majority of businesses was forced to limit their operations or close their door during the lockdown. Under the circumstances, a number of them were struggling to survive on a tight budget. Thus, they needed the tools and resources to help them face the challenges posed by the pandemic while maintaining their financial liquidity. Fortunately, technology was here to help.

Increasing importance of liquidity management tools

Growing popularity of liquidity management resulted in an enormous need for detailed financial information gathered in specialized platforms. Those liquidity management tools took the market by the storm. They have provided their users with a number of modules and options allowing them to successfully manage their businesses while helping them analyze all the financial factors in their business environment.

Soon, the impact of liquidity management tools was noticed by a number of experts in the field of banking services. Aite Group has declared those solutions one of the Top 10 Trends in Wholesale Banking & Payments for 2021. It was claimed to be one of the technologies capable of providing banks and their clients with new ways to interact and complete transactions regardless of the circumstances. This opinion was also confirmed by Celenta. This company has considered 2021 to be a year of payments – especially the ones powered by rapidly changing corporate banking.

All liquidity management tools in one

Liquidity management tools are quickly spreading all around the world. They are essential both for the banks and their customers, as they allow both parties to interact and complete necessary transactions whenever and wherever they wish. Thus, its implementation may decide the fate of the entire sector of corporate banking.

Still, effective and comprehensive liquidity management is possible – and it can easily be introduced to your financial institution. Our Corporate & Business Banking Platform includes a number of liquidity management features such as:

  • Cash Management – automated payments with direct access to all the financial details.
  • Virtual Accounts – a module allowing a company to browse and manage all the assets and liabilities for its contractors.
  • Cash Pooling – maximized profits through account management. This solution includes:
    • Zero-balancing – real transfer of funds between the accounts
    • Notional Cash Pooling – aggregation of balances and calculating the interest based on the whole balance.
  • Smartwatch and Mobile Banking – immediate access to the account on-demand with mobile devices.
  • Host-to-host banking compliant with ISO20022.

Such a platform is a comprehensive solution providing all the corporate customers with liquidity management tools they need to face the outcomes of the pandemic.

What is more, the liquidity management modules can also be implemented separately, depending on the banks’ systems and preferences. Thus, they can not only improve banks’ performance in digital channels but also allow them to expand their offer on a scale that has never been seen before.

Choose liquidity management tools included in Corporate & Business Banking Platform and discover a number of new opportunities for your business!

Ailleron - Liquidity management. What tools do the companies really need?


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